Archive for July, 2011

Posted by Henry under COSTS & CHARGES, EBAYComments Off on HIGHER FEES NOW PLANNED FOR EBAY SELLERS

EBAY TO SLUG SELLERS WITH HIGHER FEES

eBay Australia has revealed plans to more than double its fees on some auction listings, effectively penalising non-professional sellers.

The days of eBay as largely an online garage sale are finished as the company pushes sellers away from second-hand auctions towards listing new items in the fixed price format and on eBay Stores.

But as consumers and mum and dad sellers typically run one-off auctions as opposed to opening their own stores or setting a fixed price, they appear to be left worse off by the upcoming changes.

From September 22, eBay Australia will scrap insertion fees for the first 30 items listed for auction in a month. Insertion fees currently range from $0.30 to $3.50 for most items (excluding vehicles).

However, final value fees will increase from 5.25 per cent to 7.9 per cent, capped at $49.95 for each of the first 30 listings per month. This is now the same as the final value fee paid by professional sellers with eBay Stores.

Today, on a $600 item with a starting price of $400, users pay a $3.50 insertion fee plus an $18.40 final value fee (5.25 per cent of the first $75 then 2.75 per cent of the next $525). This gives a total of nearly $22 in fees.

Under the changes, on a $600 item, there will be no insertion fee but a 7.9 per cent final value fee of $47.40 will be levied.

For lower value listings such as a $20 item with a starting price of $0.99, fees will rise from $1.35 to $1.58.

“In recognition of the changing Australian retail landscape, the fee changes are aimed at encouraging professional and business sellers to list more Buy It Now items in Stores,” eBay said in announcing the changes.

It said online shoppers were predominantly interested in fixed price sales and that it expected future growth in e-commerce would primarily come from fixed price formats such as Buy It Now, which is now the most common format on the site.

eBay said the new fees would be run on a trial basis with a view to making them permanent if they “meet sellers’ needs”.

Angus Kidman, technology writer and blogger at Lifehacker.com.au, said it may be time for sellers to protest.

“This feels a little like unfair exploitation of power to me,” he said.

eBay Australia spokesman Daniel Feiler said the changes were not a revenue raising exercise and would in fact be a zero sum game for eBay considering that the insertion fees had been scrapped.

He said that while the fee increases were pronounced for high value auctions, people who sell stuff from around their homes are generally selling items that are of much lower value.

“We’ve got an issue on eBay and that is simply that most people associate us with auctions and second hand when actually the majority of our business in 2011 is fixed price buy-it-now items from retail or business sellers,” Feiler said.

“On the consumer side the big issue that the consumer has when they sell on eBay, the biggest barrier to them listing, are the insertion fees, so we’re getting rid of the insertion fees.

“But to afford us to do that we have to increase the final value fees. We net out neutral on this one.”

A spokeswoman for consumer group Choice said she did not know whether the changes would be beneficial for consumers on balance because it depended on whether the money they saved on insertion fees was more or less than the increase in the final value fee.

The Australian branch of the Professional eBay Sellers Alliance said “changes like these can be difficult to digest” but, from the Alliance’s perspective, eBay changes were generally positive.

PeSA spokesman Shaun O’Brien said eBay “tend to skew their changes to guide sellers to list in formats that buyers want, in this case heavily biased to encourage fixed price, which our sales data agrees with eBay’s in suggesting it’s the most popular format”.

Sydneysider Franco Lagudi, founder of a new eBay competitor The SOC Exchange, said the price changes showed eBay had forgotten about the individual and novice sellers that were the heart or engine room of the site.

He criticised the various fees charged by eBay including insertion fees, final value fees, listing upgrade fees, picture service fees, seller tool fees, optional feature fees and reserve price fees. The company also double dips on fees with extra charges for use of its PayPal service.

Lagudi’s business model is to charge a flat rate membership fee of $10 a year with no added fees.

“eBay’s move to professional sellers appears to be a move to exploit its dominant position and profits in the space and I urge people to fight back,” he said.

There are a number of other eBay competitors in Australia, including Gumtree, Quicksales and Craigslist, but eBay is by far the dominant player.

She calls the white Maserati she drives the “little horse”, and her orange Lamborghini the “little bull”.

Guo Meimei, 20 – who goes by the name “Guo Meimei Baby” – may be just another young woman flaunting her wealth through photographs posted on Weibo, the Chinese version of Twitter, but her link to the Red Cross of China has sparked a national debate around how donations to charities are used.

The Red Cross of China is one of the country’s largest charities and has strong ties to the communist government. And evidence of Ms Guo’s extravagant lifestyle has made the Chinese suspicious in a country where the divide between rich and poor is growing and corruption is rife.

In her microblog, Ms Guo, whose name “Mei” means “pretty”, has posted photos of herself with the sports cars, a pile of luxury Hermes handbags, sipping drinks in business class on a flight and showing off her luxury villa.

She identified herself as “commercial general manager” at the Red Cross, a position verified by Sina – the company that runs Weibo.

Suspicious Chinese netizens are asking how a young woman such as Ms Guo came into such wealth. Did she or her boyfriend embezzle money from the Red Cross to line their own pockets?

In business class … Guo Meimei Baby. Photo: AFP

Their suspicions were fuelled by a photo that surfaced on the internet in April, which revealed the Shanghai branch of the Red Cross spent 9859 yuan ($1420) on a meal.

China’s state auditor also announced in recent weeks that it found five discrepancies in its review of the Red Cross’s 2010 budget, prompting a denial of corrupt practices from the organisation, which has often been in the forefront of official fund-raising drives following natural disasters.

Ms Guo later backtracked on her Red Cross job title as China’s online activists swung into action and dug up information about her past and her relationships.

One of her cars … Guo Meimei Baby. Photo: AFP

But the damage had been done and rumours about Ms Guo and the Red Cross continued to grow.

When she tried to leave the country – purportedly to Australia – to get away from the spotlight, the Australian embassy in Beijing was inundated with calls and emails from people expressing fears that she was going to run away with “their donation money”, the Shanghai Daily reported.

The netizens had alleged Ms Guo was the girlfriend or mistress of a senior official, 42-year-old Wang Jun, who organised charity campaigns for the Red Cross.

“Everybody was saying that I used the organisation to make big bucks.”

The English-language China Daily – another state-run paper – weighed in on the debate.

“The RCSC [Red Cross Society of China], as a non-profit charity organisation, has the obligation to keep all its activities transparent and let the public know how it manages its donations and where it has spent them.

“Yet, its lack of transparency in the use of charity donations has long been a matter of concern to the public.”

“Microblogging was introduced in China in 2009 and has quickly developed into a major channel of public opinions within less than three years. Many hot incidents were first exposed through microblog posts.

“From the forum to microblogging, the people’s enthusiasm and ability to participate in public affairs has greatly risen along with the [i]nternet, which is developing at an unbelievable speed.”

English-language social media sites Facebook and Twitter – which attract millions of users worldwide and through which aspects of the Arab Spring revolutions in the Middle East and North Africa were organised – are banned in China.

Yet local sites Tencent (China’s largest internet service portal), Weibo, Baidu (a search engine) and Renren (sometimes dubbed the Chinese Facebook) have grown in popularity in recent years, and are among the world’s most visited online networking sites.

The ultimate victim of the widespread outrage may be China’s philanthropy drive.

The country is still new to philanthropy and the China Development Brief, a prominent publication, said local charities’ “lack of transparency and mechanisms to track donations” remained major stumbling blocks, AFP said.

The China Daily said as a result of the uproar over Ms Guo, 90 per cent of people who took part in an online poll the newspaper conducted indicated they would not donate to the Red Cross of China any more.

The Financial Timesnoted: “There is also a deeper problem in the lack of trust in a society whose wealthiest members often get rich through government connections.

“The idea that people would, out of the goodness of their hearts, give money away is scoffed at.”